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  • 4 focus areas for government after Budget 2016

    After Budget 2016-17 what? The ongoing Parliament session is crucial from economic reforms standpoints. Lawmakers or members of the Parliament have to debate and pass important legislation to put the country on the reform map.


Here are 4 important developments to track in this session of Parliament:

  • Fiscal reforms

    The implementation of the Goods and Services Tax or GST is the single biggest piece of legislation awaiting the Rajya Sabha nod. Political differences have kept it on hold. Another key development to watch would be the progress on the implementation of the direct benefit transfer of subsidized food and kerosene. The central government has to work with states to push for this. DBT in LPG helped save Rs 14,672 crore of subsidy in FY15, according to an oil ministry statement.

  • Invesment Cycle

    A key ingredient for economic growth is the demand for investment. Online environment-related approvals were introduced in July 2014 for the central government. The onus is now on states to adopt the practice. India also needs better labour laws. Andhra Pradesh, Gujarat, Madhya Pradesh and Rajasthan have changed labour laws to offer flexibility to businesses in hiring and retrenching. More states have to usher in these changes to attract investments. Land Acquisition Ordinance promulgated in 2015 has been allowed to lapse due to political differences. The government needs to urge states to implement land reforms if not bring in a new nationwide law.

  • Banking

    Restructuring of public sector banks is one of the most important exercises in the financial markets. If banks have high non-performing assets (bad loans), their ability to lend is hurt. This further hurts the economy as businesses are not able to plan for expansion. Over the next two to three quarters, the government is expected to bring in greater accountability and governance to PSU banks. Project ‘Indradhanush’ needs to be tracked closely for the purpose.

  • Governance

    India’s bureaucracy is known to have slowed decision-making over the years. The National Democratic Alliance or NDA government that stormed to power in May 2014 has since then worked on slashing the time taken on crucial decisions. However, it is still a 'work in progress’. Too much red tape is a breeding growth for black money, which hurts the economy. The progress the government makes on the voluntary disclosure scheme and moving India towards a cashless economy by encouraging people to do online transactions would be watched closely.

    • In an update on Tuesday, the International Monetary Fund said that India should continue with economic reforms Read more

    • The slow progress of India’s economic reforms is criticized by the international press. Read more

  • Rs. 20 crore

    There are 20 crore Jan Dhan Yojana accounts opened as a part of the financial inclusion initiative, according to government data. With the adoption of Aadhaar and a legislation to back it, the government would be able to extend the programme for direct transfer of subsidies. This could plug significant leakages in subsidies and usher in a reform.